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Diebold reported better than expected results for the first quarter of 2012 on April 25. Earnings per share came in at a record 71 cents, crushing the Zacks Consensus Estimate of 33 cents.

Total revenue rose 14% year-over-year to $698.4 million, well ahead of the Zacks Consensus Estimate of $646.0 million. This increase was driven by growth in North America and Asia Pacific, which was partially offset by declines in Europe, the Middle East & Africa (EMEA) and Latin America.

Gross profit expanded from 25.3% to 27.6% of revenue while operating expenses declined from 21.0% to 19.4%. These factors led to a remarkable 117% surge in operating income.

Outlook

Diebold's Q1 results where bolstered in part by accelerated ATM installations related to the March deadline for U.S. financial institutions to meet requirements for the Americans with Disabilities Act. But management still increased its full year guidance for both revenue and earnings.

The company now expects to earn between $2.50 and $2.70 per share on revenue growth of 7-10%. This is up from previous guidance of $2.30-$2.50 on revenue growth of 3-6%.

This prompted analysts to revise their estimates higher for both 2012 and 2013, sending the stock to a Zacks #1 Rank (Strong Buy).

The Zacks Consensus Estimate for 2012 is now $2.63, within guidance, and representing 14% growth over 2011 EPS. The 2013 consensus estimate is currently $2.80, corresponding with 7% growth.

Dividend

Diebold also announced a dividend increase earlier in the year. Since 2000, the company has steadily raised its dividend at a 5% compound annual growth rate:

It currently yields a solid 2.9%.

Valuation

The valuation picture looks reasonable for Diebold. Shares trade at 15x 12-month forward earnings, a small discount to its 10-year median of 16x.

Its price to sales ratio of 0.9 is in-line with its historical median and well below the industry median of 1.9.

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